New Year's Predictions

It's New Year's Eve and I thought I would make some not so fearless predictions. "Not so fearless" because if I'm wrong, there is really no downside if I am wrong. Last year's predictions weren't that great. Some things I got wrong.

1. Romney would fade as a candidate due to lack of tea party support.
2. The economy would recover then stall. It just never really recovered.
3. The nut roots would froth at the mouth at Obama. They occasionally did so, but not much.
4. A multi-employer union pension plan would go bust. None did, although Kroger took some action due reduce risk to such funds that it contributes to.

The big thing I got right was that the battle to reduce spending would be mostly a draw due to divided government.

On to my fearless 2012 predictions.

1. The world will not end in December, although many will wish it would due to an Obama victory in November.*
   
2. Romney will be the Republican nominee.
3. The economy will recover but stall around election time, but not soon enough to derail Obama's election prospects. The signs of recovery abound. I recall reading over the past two weeks that consumer confidence is up, steel prices are up, on-line holiday sales are up 15% and new unemployment claims are down. Enough good news would allow Obama to eke out a victory, because the Republicans have not made the case that they are not the party of business interests married to government.
4. Looming economic disasters in China and Europe will be put off until the end of the year.
5. Pension reform will pass locally in San Diego.
6. Global warming debate will remain unsettled as higher sunspot activity will continue a warming trend.
   

These are my own predictions, I am sure my fellow SLOBs will be posting their own.

*Of course, I am not rooting for an Obama victory, but it is the way to bet. Also, my history of Presidential predictions is almost perfectly inaccurate, starting with Goldwater in 1964.

Death to Ethanol Subsidies

The Iowa caucuses are only a few days away, and interestingly, the tax subsidy for ethanol production steep import tariffs are about to expire about the same time. I have inveighed against the evils of these subsidies for some time. Seeing their expiration is a cause for rejoicing, and evidence that we can win victories against entrenched special interests. Unfortunately, there is still a federal law on the books that requires the use of ethanol in gasoline. H/T WSJ.

It's also great to see that ethanol hasn't become a burning issue in the Iowa caucuses; perhaps because of the near universal condemnation the whole program is receiving. No matter, time to start taking on other formerly sacred cows of government subsidy. Anyone up for removing the home mortgage subsidy next?

Makes more sense than paying to convert it to ethanol.

Weekend Music Chill - New Year's Edition

We've been watching a lot of football and it's almost New Year's Eve, so what better music to post than Gary Glitter's Rock and Roll Part 2.



And to round our festivities with another stadium favorite, here is Kernkraft 400 with Zombie Nation, supposedly the sports chant stadium remix edition.

Iran Displays its Weakness

Even dictators are politicians, who must win the support of key constituencies to remain in power; how else to explain the hold on power by such madmen as Kim Jong Il. Bret Stephens explained this best in this 2009 WSJ article.

Tyranny is a demanding and quintessentially human art, requiring, among its better practitioners, a discriminating nose for the weaknesses of others and a keen mind for how to exploit them to the fullest. The weaknesses of your own people—the sublimated terror of the masses; the petty ambitions of the cadres; the cravenness of your inner circle—you know only too well.

But a tyrant’s training is no less useful for the manipulation of free men. What keeps an abused and subjugated people in line is the constant fear that things could suddenly get dramatically worse, along with the sporadic hope that things might also get marginally better. So long as most people feel they have much to lose and something to gain, you will have them in your power.

Which brings me to Iran's recent threat to close the Straits of Hormuz to shipping if sanctions were imposed on its crude oil exports. While this may seem a replay of the sort of moves that Kim made famous, I think this is clearly a signal that the Iranian leaders are in a weak position. Kim's threats were aimed at parties who lacked the desire or the means to fully call his bluff, specifically China and South Korea. The Iranian threat directly impacts Obama's re-election prospects and he has the means, in the form of the U.S. Fifth Fleet, to do something about it.

Consider the bearded ones' positions. Despite years of work, they still seem a ways off from achieving their goal of building a nuclear warhead that can be delivered at a distance. Clearly the U.S. and/or Israeli campaign of sabotage and assassination has been successful in slowing their nuclear progress. It seems that the mullahs are in a race against time; they feel the need to fulfill their nuclear ambition to secure their base and to increase their popularity before popular discontent with their failing socialist economy causes the government's collapse. This is why the threat to close the Straits of Hormuz is so telling. It is an almost credible threat, but reveals that they are nervous about the impact of economic sanctions. From the CIA factbook on Iran:

Iran's economy is marked by an inefficient state sector, reliance on the oil sector, which provides the majority of government revenues, and statist policies, which create major distortions throughout the system. Private sector activity is typically limited to small-scale workshops, farming, and services. Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Significant informal market activity flourishes. The legislature in late 2009 passed President Mahmud AHMADI-NEJAD's bill to reduce subsidies, particularly on food and energy. The bill would phase out subsidies - which benefit Iran's upper and middle classes the most - over three to five years and replace them with cash payments to Iran's lower classes. However, the start of the program was delayed repeatedly throughout 2010 over fears of public reaction to higher prices.

The dependency on oil revenue to buy domestic peace is clearly their weakness. Another significant weakness, not mentioned in the factbook, is that the Iranians import significant amounts of their gasoline, despite their oil production.

With regards to policy towards, Iran, it seems that the current one is probably the best plan. Use covert means to sabotage the program and delay its progress, and build a consensus on sanctions. We are in no position to threaten full scale war with Iran, nor would we want to do so if sanctions and sabotage can achieve our goals. The ayatollahs are deeply unpopular, starving them of the means to buy domestic support will bring them down.

For to win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.

Another Trillion in Debt

The President notified the Congress that he needed some more pocket change to keep the federal government running, to the tune of $1.2 trillion. Under the terms of the misbegotten deal that was struck last August, the President is authorized this last raising of the debt ceiling unless Congress can override a veto that would certainly come if they disapprove.

The deal turned out badly, for many reasons. The Super-Committee failed, and automatic cuts are supposed to kick in, but not until October 2012. Elections are going to intervene before any real change is effected, hence the failure. In hindsight, enabling a super-committee was a bad move tactically and constitutionally. I am sorry I thought it might work to reduce the debt. Deals to continue the payroll tax holiday only make another debt ceiling crisis right before the election more likely.

Speaking of elections, here is the most interesting question. Did the administration miscalculate? Might the debt ceiling actually come into play prior to the November elections, rather than in 2013, as previously predicted? The current limit is $15.194 trillion, which was reached rather quickly, it seems. If the debt ceiling becomes a problem prior to the election, what will the administration do? Here is a hint.

A Treasury Department document shared on Tuesday said that if the limit is reached before the elections, the government could take “extraordinary measures to extend borrowing authority beyond the next elections.” But the department offered no detail.

Because, as Dean often states, Constitutional Republics, are like, hard. I think the political fall out from the Treasury taking such action would be bad for Obama, so he might be forced to grandstand on the issue and take this to the Congress. It would give him an opportunity to run against Congress, instead of the Republican nominee. I hope Boehner is thinking this one through, but I am worried.

The winners of next November's elections will face very tough decisions; we are running out of room to maneuver. That makes these elections the most important in our lifetime.

Merry Christmas

Taking the day off from politics and blogging. Merry Christmas from the B-Daddy family. Here is a little Christmas cheer.




Old blue eyes has the best version of this song, but I like Judy Garland's as well, unfortunately, embedding is not available for her video.

Christmas Pancakes

It has been a tradition in our household that I make pancakes on Christmas morning. My sons have always been big fans. When we first started doing this, a simple recipe involving Bisquick sufficed to make them happy. As they grew older, I wanted to keep making improvements, because they were always so giving of their love and appreciation for the effort I put into Christmas breakfast. A wise man told me years ago that having children would change my life for the better. At the time, I didn't see how. I thought of all the things I wasn't going to do and all of the responsibilities I would soon be shouldering. He was wise enough not to try to explain it to me, because I don't think I would have understood.

My boys are in college now, but still live at home, so I still get to make pancakes for them. God richly blesses my life. I don't know how many more Christmases like this we will have. They will soon have careers that may take them far away. So, I want to share my latest Christmas pancake recipe with you, maybe it will inspire someone else's Christmas tradition.

B-Daddy's Beer Pancakes

This recipe makes 12-14 pancakes.

Ingredients:

2 cups less 4 tbsp Organic FlaxPlus Multigrain Pancake Mix
6 tbsp Granulated Sugar
2 packs Instant Oatmeal mix (flavored is fine, I used Maple-Brown Sugar)
1 tsp Baking Powder
4 tbsp Wheat Germ (if you don't have wheat germ, use the whole 2 cups of pancake mix)
2 tbsp Canola Oil
2 tbsp Lemon Juice
3 tbsp Trader's Vic's Macadamia Nut liquer (or your favorite, or use 2 tbsp vanilla extract)
12 oz Shiner Bock beer (or any flavorful malty lager or ale, I don't recommend hoppy ales.)
4 tbsp Butter (for the griddle)

Set up two bowls, wet and dry.
In the dry bowl, stir the Pancake Mix, sugar, oatmeal, baking powder and wheat germ to an even consistency.
In the wet bowl, add, in order, the oil, lemon juice, liqueur and beer.

Now gently pour the contents of the dry bowl into the wet side. There should be considerable foaming from the beer. Very gently, with a fork, stir the ingredients. This will take some time, as you want to break up the clumps of mix that are hiding the dry material inside. At first, the mix will appear too runny. Be patient, the oatmeal takes time to absorb the liquid.

Preheat a griddle on medium low heat, and grease with butter to an even coat. Be careful with the temperature, these pancakes burn easily, even if the bubbles haven't stopped.
Pour a full 1/4 cup per pancake. I usually use a 1/3 cup measuring cup to make sure I can easily get the full 1/4 cup onto the griddle. Flip the pancakes a little earlier than the normal rule of waiting until the bubbles have almost stopped. In about a minute they should be done. Serve with your favorite syrup.



P.S. Those good looking rascals pictured above get their looks from their beautiful Mom.

If You're Flying These Holidays

You should feel very, very safe, if your flight is on a U.S. flagged carrier. There were no fatalities in 2011, and only two in 2010, according to a WSJ article. Today, the chance that an airline flight will have an accident with a fatality is sitting at about one in 11 million. Flying is up to 100 times as safe as car travel by some estimates.

Meanwhile there was much ballyhooed release of new regulations to ensure that pilots and air crews get enough rest. Measure these remarks against the actual safety record shown at right:

Calling the long-awaited regulation a "landmark safety achievement" that resolves pilot-fatigue issues that have been festering since the 1970s, Transportation Secretary Ray LaHood on Wednesday said the changes were based on the latest scientific sleep research.

Perhaps the reference to sleep research is true, but to say that there is a long festering safety issue is demonstrably false. Fortunately, the new regulations aren't quite as onerous as originally thought.

Total projected compliance costs for industry dropped to about $300 million over 10 years, compared with $1.2 billion as originally proposed. FAA officials said they believe the industry won't have to hire new pilots to comply. Even so, the FAA still faced a seemingly big challenge justifying costs versus benefits.

According to the 300-plus page regulation, the value of anticipated benefits ranges from $247 million to more than $700 million over 10 years. Those benefits could include avoiding accidents, reducing aircraft damage and lowering insurance costs

I agree that reduced accidents have great economic value, the first article quoted savings of $600 million per year due to the low accident rate. But the accident rate is already close to zero, so I think we are just going to increase the cost of plane tickets with added regulation. We know from standard economic analysis that for each increase in airline ticket prices some people will choose to drive. That choice will result in more deaths. Why isn't this taken into account in regulatory analysis? It always sounds great when the government announces new regulation to increase safety, but there is a cost to regulation that has unintended consequences. This is why I view the regulatory regime with suspicion.

Weekend Music Chill - Christmas Edition

Merry Christmas, and Happy Hanukkah, which goes from December 20 to 28 this year. Like last weekend, I want to play one modern and one traditional Christmas tune.


Here are The Waitresses with Christmas Wrapping.



Here is a traditional rendering of Good King Wenceslas from York Minster in 1995.

Lying, Cheating . . . whatever

I read a couple of articles today that made my blood boil, not only because of what happened, but because I am certain that there will be absolutely no accountability imposed for lying and cheating. Exhibit 1, involving the DOJ and that miserable hack, of course, involves admitted perjury by a justice lawyer, presumably an "officer of the court." H/T HotAir. From PJMedia.

Stephanie Celandine Gyamfi, reportedly told investigators from the Inspector General’s Office that she perjured herself during an inquiry into Justice Department leaks during the previous administration. Despite the admission, she has not been fired for criminal malfeasance. Indeed, it appears she has not been disciplined in any meaningful way at all.
. . .
According to numerous sources within the Section, Ms. Gyamfi had been asked in two separate interviews whether she was involved in the leaking of confidential and privileged information out of the Voting Section. Each time, she flatly denied any knowledge as to who was responsible for the leaks. In a third interview, she was once again questioned about her role in the leaks. At first, she adamantly denied involvement. Then, however, she was confronted with e-mail documents rebutting her testimony.

And here is the kicker, and what drives me to despair. The lack of accountability.

Amazingly, despite Ms. Gyamfi’s admission of committing perjury not once, but three times, she so far has been neither terminated nor disciplined by the Justice Department. In fact, her boss, Voting Section Chief Chris Herren, continues to assign her to the most politically sensitive of matters, including the Department’s review of Texas’s congressional redistricting plan.

Mere mortal employees of the federal government, such as yours truly, would find ourselves out on our butts, our security clearances revoked and generally unemployable if we were determined to have perjured ourselves. Further, we would not even have to be convicted beyond a reasonable doubt, the mere preponderance of evidence would be necessary to get ourselves fired. But because Ms. Gyamfi's political positions are useful to this administration, jack will be done.

Exhibit 2 is even more painful, because it expressly violates the will of the voters in California. Olga Pierce and Jeff Larson have a devastating article in ProPublica titled, How Democrats Fooled California’s Redistricting Commission. The whole article is almost too much for me to take. It is such an obvious first step on the road to dictatorship that I have difficulty absorbing the article's entire contents.

In previous years, the party had used its perennial control of California’s state Legislature to draw district maps that protected Democratic incumbents. But in 2010, California voters put redistricting in the hands of a citizens’ commission where decisions would be guided by public testimony and open debate.
. . .
n the weeks that followed, party leaders came up with a plan. Working with the Democratic Congressional Campaign Committee — a national arm of the party that provides money and support to Democratic candidates — members were told to begin “strategizing about potential future district lines," according to another email.
. . .
When they appeared before the commission, those groups identified themselves as ordinary Californians and did not disclose their ties to the party. One woman who purported to represent the Asian community of the San Gabriel Valley was actually a lobbyist who grew up in rural Idaho, and lives in Sacramento.
. . .
The losers in this once-a-decade reshaping of the electoral map, experts say, were the state’s voters. The intent of the citizens’ commission was to directly link a lawmaker’s political fate to the will of his or her constituents. But as ProPublica’s review makes clear, Democratic incumbents are once again insulated from the will of the electorate.

We used to have a consensus in this country that crimes against the public trust were serious and important enough to warrant punishment, regardless of the politics of the perpetrator. If we accept that any amount of lying and chicanery is acceptable in the name of political gain, then we have surely lost our way.

Payroll Tax Fiasco

Pillars of the economy meet with members of Congress.

Today's WSJ editorial excoriates House Republicans for their mishandling the payroll tax debate. While there is plenty of tactical political blame to be shared by Boehner and McConnell, the real crime is that we are debating this at all. The tax holiday on payroll taxes that temporarily cut the rate from 6.2% to 4.2%, is never going to be made permanent. Everyone knows it, so any impact on hiring is already discounted. The current tax holiday has done nothing for unemployment, which remains stubbornly high. Worse it is blowing a hole in the social security accounting, bringing the day of bankruptcy closer, much faster.

A better approach comes from John B. Taylor, on the opposite page from the editorial, who argues that stable tax policy would help recovery much more than any gimmickry. I would say that stable regulatory policy should be added to the mix, as well. He points out that the Congressional Budget Office has called for higher tax rates as one option to repair social security's balance sheets. The current loss of revenue from reduced rates only makes that option more attractive in the long run, so it is a self defeating policy, as employers know that they are likely to be saddled with higher taxes later and just have to lay people off. As a manager, I am always trying to balance hiring against future budget expectations, sometimes leaving positions vacant as a hedge. I can't imagine business owners think differently.

Taylor has a slightly different argument about why the temporary holiday is bad.

But the policies are worse than doing nothing at all. Rather than stimulate the economy, they hold the economy back by creating policy unpredictability and by distracting Washington from crucial long-term reforms that are key to restoring economic growth and creating jobs.

He also attacks the complexity of the tax code, and notes that there are 84 temporary provisions expiring this year. I think the Congress likes the temporary nature of the provisions, because they can collect rents from special interests every few years as inducement to extend them. This is in line with my recent theme of crony capitalism. How can the following temporary measure be of any value to the economy? "Three year depreciation for race horses two years old or younger." Really, when the race horse owners, those pillars of the American economy, need this policy extended, I am sure they are going to be very generous giving to their senator's re-election campaign.

Congress - Putting the Crony into Capitalism

Walter Russell Mead, getting to be one of my favorite writers, takes down Congress and Wall Street on their extremely cozy relationship. This whole article is worth a read, because it proves the old saw that the real crime is what's legal. A brief summary.

• Hedge fund investors and other key Wall Street insiders get tipped off by Congress and staffers on legislative direction. From the WSJ: When Senate Democrats finally brokered a compromise over the proposed health-care law, a group of hedge funds were let in on the deal, learning details hours before a public announcement on Dec. 8, 2009.
• As Mead notes. Fabulous profits are there to be made, perfectly legally; legislators do Wall Street a favor by giving the hedgies an early head’s up, the hedgies reciprocate by making large campaign contributions. Everybody wins except for the pathetic losers not part of the magic inner ring, and nobody breaks any laws.
• Congresscritters in turn, personally benefit from being brought in on deals that you or I can only dream about. Nancy Pelosi and her husband were parties to a dozen or so IPOs, many of which were effectively off limits to all but the biggest institutional investors and their favored clients. One of those was a 2008 investment of between $1 million and $5 million in Visa. . .
  
• OWS got it wrong, the problem isn't Wall Street, but the coziness between Wall Street and Washington, which the Tea Party better understands. The paternalistic and benevolent government envisioned by the architects of the blue social model has morphed into a corrupt insider state that can no longer regulate or protect. The answer can’t be to give more power to people like Chris Dodd; that is what the Tea Party understands and the OWS folks too often miss.

Considering all of the advantages that Congress has, we find studies that show that members of the House of Representatives stock market returns beat the market by 6.8%. To quote Dean:

These guys write the legislation, they make the rules... and they're completely immune from taking advantage of gaming the situation in any manner they feel... and they still can't make out any better than 6 and 12 percent above the market average?

U.S. Congress: where corruption meets complete incompetence.

No Blogging Tonight

Enjoying some family time.

Obamacare - What Actually Changed?

. . . Other than a morass of new regulation? As the slow moving train wreck called the Patient Protection and Affordable Care Act rolls down its tracks of doom, it seems that many of the worst elements of health insurance have survived. All that has been added are layers of bureaucracy, as if even more regulation was going to help an industry choking on it. Here is the latest instance of plus ça change, plus c'est la même chose. From the Wonkblog at WaPo.

Under the health reform law, every insurance plan will be required to cover a set of “essential health benefits.” The Affordable Care Act defines 10 broad categories that must be included, such as “professional services of physicians and other health professionals” and “hospitalizations.” What fits within those categories is up to the Obama administration. Any plan that wants to sell on the new insurance marketplace will have to cover the benefits.
. . .
But what Health and Human Services created today wasn’t really an essential health benefits package at all. Instead, the department announced that every state will have the option to determine essential health benefits themselves, by using standards that already exist in their states. “The state is always in control of what the essential health benefit plan is in that particular state,” Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, told reporters this afternoon.

How is that really different than today, where insurance is regulated by the states? The Secretary of HHS can now sue each state if he/she doesn't like their interpretation of the law, setting up politically motivated punishments of states by the federal executive branch, consolidating federal power. While the Obama administration would never abuse its power to sue a state trying to conform to federal law, what if those wascawy Wepubwicans ever win the White House? Something for you Democrats to think about.

Fruther, if the Supreme Court fails to strike down the individual mandate, the case is more important from a precedent setting perspective than from a practical one. The fines set for the individual mandate are not set high enough to get compliance. Further, there are weak enforcement mechanisms. From Randy E. Barnett in the New York University Journal of Law & Liberty.

Moreover, unlike Sonzinisky, the penalty does not even purport to be a tax. It is called a “penalty.” Although the penalty was inserted into the Internal Revenue Code, Congress then expressly severed the penalty from the normal enforcement mechanisms of the tax code. The failure to pay the penalty “shall not be subject to any criminal prosecution or penalty with respect to such failure.” Nor shall the IRS “file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section,” or impose a “levy on any such property with re- spect to such failure.” All of these restrictions undermine the claim that, because the penalty is inserted into the Internal Revenue Code, that it is a garden variety tax.

What did this atrocity really get us? More bureaucracy and regulation, less choice, maddeningly more complex regulatory landscape, more subsidies, more debt and a dubious precedent that will effectively grant Congress unlimited power over every person if upheld. Glad we had time to read the bill.

Agreeing With Krugman on China - Truly Scary

Paul Krugman is the economist/columnist that I love to hate. He is probably brilliant in some way that I cannot understand, because I almost never see it in his work at the New York Times. He is a Nobel Prize winner, but I often wondered if his award was not politically motivated, in much the same way that Obama's clearly was. I was surprised to find his analysis of China's economic situation quite penetrating. I had argued against Glenn Beck and others that China was not the formidable foe they thought. My unlikely ally in this regard is Krugman. Some key points.

Still, even the official data are troubling — and recent news is sufficiently dramatic to ring alarm bells.

The most striking thing about the Chinese economy over the past decade was the way household consumption, although rising, lagged behind overall growth.

. . .China increasingly relied on trade surpluses to keep manufacturing afloat. But the bigger story from China’s point of view is investment spending, which has soared to almost half of G.D.P.

. . .it [the motivation for this investment] depended on an ever-inflating real estate bubble. Real estate investment has roughly doubled as a share of G.D.P. since 2000, accounting directly for more than half of the overall rise in investment.

Do we actually know that [Chinese] real estate was a bubble? It exhibited all the signs: not just rising prices, but also the kind of speculative fever all too familiar from our own experiences just a few years back — think coastal Florida.

. . . it’s impossible not to be worried: China’s story just sounds too much like the crack-ups we’ve already seen elsewhere.

Krugman also takes to task those who think that China's "strong, smart leaders" who don't have to bother with democratic niceties will somehow handle the situation. He points out that endemic bribery at the local level limits the central government's ability to govern. I would add that even dictatorships are subject to political pressures, which ultimately cannot be ignored.

We have a good news, bad news situation. Despite all of the troubles of the Unites States, there is no other nation close to being able to challenge our leadership, not the Europeans, not China and not Russia. However, if China also starts to suffer serious economic hardship, then a global depression seems possible.

Managed Competition with Subsidies is not a Free Market in Health Care

Paul Krugman summarizes the leftist argument for socialized medicine in today's New York Times. He also cites a longer article by Ezra Klein purporting to prove that competition doesn't lower the cost of health care. Krugman's summary.

Patients by and large don’t have the information to evaluate medical treatments; in any case, they mainly buy insurance rather than medical care directly; and insurers profit not by providing the most cost-effective care, but by trying to insure people who won’t need care.

And it’s not as if market competition hasn’t been given a try; in this country it has been tried over and over, by politicians who won’t take no for an answer.

Ezra Klein cites any number of examples such as Medicare Advantage and Medicare Part D to show that the competition within those programs has not lowered costs.

These are misleading arguments that need rebuttal.

• In a free society, why is it a goal to spend less on health care? If we have rising levels of discretionary income, why wouldn't we choose to spend more on improving our quality of life?
  
• We conflate total costs with unit costs. An aging population is going to consume more health care, there is nothing to be done about the demographic curve. However, competition can reduce unit costs.
• Even if people have to make decisions about medical providers under emergency conditions, they do not make decisions about insurance plans that way. True competition between plans is stifled by Obamacare and so many other regulations.
• Even under emergency conditions, people make informed decisions about health care treatment. They can often decide which emergency room to visit and have information about who is best when they do so. During my last few emergency room visits, I arrived by private vehicle, in full possession of my faculties, as did over 90% of the other patients I saw there.
• If we had people paying significant out of pocket expenses, and they had better choices in health care providers, then an Angie's List for doctor's would spring up. Krugman thinks the average person as both ignorant and stupid, unable to learn for themselves. When the chips are on the line, I find people to be just the opposite, researching treatments and providers extensively.
• Competition has been slowly squeezed out of the market place ever since the introduction of Medicare and the insurance industry following all of Medicare's practices. It is a lie to say that any free market solution has been tried in the last three decades. Klein makes the classic leftist argument that when a quasi-competitive managed system that also involves government subsidies and regulation doesn't deliver cost savings, this is proof of the failure of free markets. It is not.

Until we decouple insurance from work and free up the insurance industry to provide plans with high deductibles and relatively high catastrophic caps, we are not going to get unit cost containment. Until the baby boomers leave the stage, we are going to see increases in health care costs, period.

Keystone Pipeline and Latest "jobs" Bill

The Democrat controlled Senate passed a two month extension of the payroll tax cut and an unemployment benefits extension. Although touted as a jobs bill, this will do little to help the economy. The payroll tax cut has so far done nothing, and will continue to do nothing except bring the day of reckoning on social security much sooner. That this doesn't produce cognitive dissonance at the AARP is beyond me and shows how deeply they are embedded with the Democratic party.






However, the Republicans managed to get a provision into the bill forcing the administration's hand on the Keystone XL pipeline. I was wondering how the left might spin this, and was surprised at the pretty realistic coverage by Joan McCarter at DailyKos:

Of course this doesn't mean that construction on the pipeline itself will be expedited, it's just intended to make Obama look bad at the beginning of an election year. When it's denied, as the State Department has already said would happen if forced to have to decide in just 60 days, Republicans can screech about his killing jobs. If he overrules the State Department, a possible but unlikely outcome, then Republicans can watch his base explode. Their favorite pastime.

Of course Joan doesn't remember the first Bush years, and all of the Reagan administration, where this was the favorite pastime of Democrats. It's a healthy part of the political system, because it forces choices on the parties and makes them say what they stand for. This is why being in power is hard, you can't equally please all parts of your coalition. In this case Obama will be forced to choose between his base of enviro-greenies and labor. I think that he will still try to finesse the deal, but it will be a test of how badly he wants to be re-elected. My guess is that because he does desire re-election, he will stiff the greens, because they have nowhere to go, and ensure labor support, because they have cash and boots on the ground.

Mark Meckler Arrest in New York

Mark Meckler, head of the Tea Party Patriots, was arrested at New York City's La Guardia airport, after declaring that he was carrying an unloaded firearm, following TSA regulations for so reporting. He was arrested for his troubles. SarahB at Lipstick Underground has the details. Bottom line, federal law protects his transport, as he has a permit for concealed carry. New York City merely wants to harass travelers because of their animus against the Second Amendment. They will lose this court case, but all people will remember are the headlines that some tea party dude brought a firearm to the airport.

Podcast below that gives a full explanation.

KOGO Podcast

Weekend Music Chill

We may not be blogging next weekend, and its time to get into the spirit of the season, so here is some Christmas music, of two very different styles.




This one is for Nanny.

Republican Sioux City Iowa Debate

I watched most of the last Iowa debate tonight and was impressed with the Republican candidates. Practice, if it doesn't make perfect, gets you pretty far down the road to it. Some observations.

• I saw some passion from Romney. This was his best performance. I loved his defense of his time at Bain Capital. He cut some jobs, but he also created jobs. Then he makes a very sly move and compares it to when "Obama ran General Motors." Killer move, because he isn't criticizing the take over, but it is so unpopular, that reminding voters of it is toxic to Obama.
• Rick Perry had one of the more memorable lines, comparing himself to Tim Tebow, as an underdog candidate. Also very sly, given the current controversy and the make up of Republican voters in Iowa. I think that if Perry can get a ground game going in Iowa and South Carolina, he may still have a chance.
  
• Gingrich had a great performance, except in explaining the nature of his services to Freddie Mac. As popular as it was, I wasn't happy about the whole judges testifying before Congress part. Another example of a seemingly brilliant, "out of the box idea," that didn't get the vetting needed.
  
• Bachmann looked bad, because, even if she damaged Gingrich, she looks a bit unethical in making baseless charges about Gingrich's work at Freddie Mac. I found her attack distasteful, as she suggested it was somehow unethical, with zero evidence to back up her claim.
• The discussion on Iran did no one any favors. Ron Paul sounded weird and defensive, and couldn't make the sale, but the rest of the gang sounded trigger happy. My belief is that the clandestine war that we are already conducting is the best approach. But if they get a nuke, its not the game changer everyone thinks. A nuke is eventually going to be used in the region; better it come from the devil we know, to give BMD a chance, than from a surprise source that we aren't prepared for. Now what to say in public about it? That's the tough question.
  
• Romney also responded to the flip-flop question with facts and sincerity. When you look at the fact that he governed Massachusetts as a Republican with huge Democrat majorities, you are looking at a guy who made some compromises to get things done. He touted his veto record as governor, but didn't mention how many were overridden.
  
• Santorum did a good job too, I just have a hard time being objective. It's a personal gut reaction thing for me, I just don't like him.
• Jon Huntsman was at the debate and sounded intelligent as well.
  

I saw a tweet that Gary Johnson is going to run as a Libertarian. This is bad news, if true. After the debate Ron Paul made it pretty clear that he isn't running as a third party candidate, even though he didn't rise to Sean Hannity's challenge to offer an absolute pledge. I get the feeling that Ron Paul finds Obama so distasteful that he wouldn't want to facilitate his re-election. But Gary Johnson might pull in enough tea party types angry over their choices to hurt the Republican nominee's chances. Hard to say if the desire to see Obama off would overcome the loathing of the current field as more of the same establishment Republican types.

All told, when I think through Obama's baggage, the bad economy, everything Holder does, Solyndra, Fast and Furious and ongoing bailouts, I believe he can be beaten. But he is the President, sitting on a mountain of cash, so we should remember that he will be looking to whack his opponent, figuratively, of course.